News Clips

EU blocks GE merger, fearing dominationNEW YORK — General
Electrics $41 billion purchase of Honeywell International was
vetoed Tuesday by the European Union — the first time a merger of
two U.S. companies has been stopped solely by European
regulators.

The decision by the EUs 20-member Competition Commission in
Strasbourg, France, was unanimous.

GE chief executive Jack Welch left open the possibility of an
appeal, characterizing the widely expected rejection as a setback.
But analysts said the deal — one of the biggest industrial mergers
in history — is probably dead. Subway restaurants settle suit for
$10 millionSEATTLE — An 8-year-old boy who contracted hepatitis A
and needed a liver transplant after eating at a Subway sandwich
outlet won a $10 million settlement.

The settlement announced Monday resolves a lawsuit filed by
Christian Decker and his parents, who ate at a Subway outlet in
September 1999.

The boy was the most seriously affected of the 35 people known
to have contracted hepatitis A in the outlet. Unlike the others,
who recovered, Christian had to undergo a lifesaving liver
transplant in November 1999.

He is expected to need another transplant eventually and will be
on medication for the rest of his life to keep his body from
rejecting the transplant, according to court documents.

Others who became ill in the outbreak settled a separate
class-action lawsuit for more than $1 million last year.Engine
cracks has airlines grounding jetsATLANTA — Airlines have grounded
several Boeing 757 jets while they scramble to make repairs or find
replacement parts because of cracks in the air-flow blades of their
Pratt & Whitney engines.

At least two in-flight engine failures have been blamed on the
cracks since late last year.

The cracking has happened in the stator vane, a stationary blade
made of steel alloy that helps direct air flow through the
engine.

The cracking can cause an engine to shut down. But the 757 has
two engines and can fly on one.

We believe the cracking is caused by the variety of pressures
the engine is undergoing, said Mark Sullivan, a spokesman for
Pratt & Whitney.

Pratt & Whitney, based in East Hartford, Conn., is working
with airlines to repair or replace the part, which it is
redesigning. But the new design will not be tested and certified
for use until December.IBM trims 1,500 workers from GS groupARMONK,
N.Y. — After adding more than 10,000 employees this year, IBM
Corp.s burgeoning Global Services group is laying off about 1,500
workers.

The cuts are being made at various U.S. locations to respond to
changing client demand and do not reflect a business slowdown, IBM
spokeswoman Jan Butler said Tuesday.

Global Services, IBMs consulting and outsourcing arm, is one of
the companys fastest-growing units. According to Gartner
Dataquest, it is the worlds largest information technology
services unit.

With the hiring of more than 10,000 new workers in the first
five months of 2001, it now employs some 150,000 workers. IBM
counts more than 315,000 employees worldwide.

Shares of IBM were off $1.15 to $113.20 in trading Tuesday on
the New York Stock Exchange.Dow Chemical says earnings to fall
shortNEW YORK — Dow Chemical Co., the second-largest chemical
company in the U.S., said it does not expect to meet its previous
earnings expectations as demand has not been as strong as had been
anticipated, affecting both volume and price.

The company now expects to earn 33 cents a share in the second
quarter, down from its previous guidance of 35 cents to 45 cents a
share. Analysts had expected Dow to earn 33 cents a share. It will
release final earnings on July 26.

The Midland, Mich.-based Dow lost $685 million, or 76 cents per
share, in the first quarter. Excluding a $1.4 billion charge
related to its takeover of Union Carbide, the company would have
earned 26 cents per share.

Dows earnings have been affected by the high energy prices over
the last year. Chemical companies such as Dow depend on natural
gas-related raw materials, such as hydrocarbons, to make its
products, which range from plastics to pesticides. Natural gas
prices spiked to record levels this winter because of low natural
gas storage levels.